Guides · 1 Nov 2026

Excise bond register for distilleries

An excise bond register is the distillery's running account of spirit held or moved under state excise control, in bulk and absolute litres, from production to removal. No national format exists, so the forms, wastage limits and bond conditions come from your state's rules and your excise officer.

What the term means

Excise control of spirit is largely a state matter. "Bond register" is a working name in mills, and your state's rules may use other words such as vat account, spirit account or stock account. The purpose is the same. The department can see every litre made, stored, issued and lost, and whether duty or a fee applies.

Bond has two common meanings. First, spirit may be stored without payment of duty. Karnataka's warehouse rule covers storage "with or without payment of excise duty". Second, spirit may move under a bond, where the sender stays liable until the receipt is proved. Maharashtra's 1966 rules show this for potable liquor. A bond in Form P.L.-XIV covers duty, a certificate is due within two months of the bond date, and duty on any short delivery is recovered.

Ask your officer which meanings apply to each product. Ethanol, rectified spirit and ENA can sit under different rules. In 2023 the Bombay High Court held that ethanol is rectified spirit under the Bombay Prohibition Act, 1949, whether it is made from molasses or cane juice. That case cites Maharashtra's Rectified Spirit Rules, 2009, whose text we could not review.

How three states differ

These points come from published rule texts and an audit report. Some are old, so check the current version.

State	Accounts	Wastage and loss	Movement
Maharashtra (1966 rules)	Form VII daily vat account, Form VIII daily spirit stock, Form IX monthly account by the 5th, Form X extract by the 7th	Form XI report for loss above 2% in distillation or 0.5% in transactions	Notice in Form VI before removing wash or spirit
Karnataka (1967 rules, amended 2026)	Rule 24: accounts in forms the Commissioner requires	Rule 25: stock accounted at least every three months, duty on unaccounted spirit beyond a 1% allowance	Rule 33 gauging before removal, Rule 34 permit in Form 3
Uttar Pradesh	Confirm forms with your officer	A 2009 CAG report cites up to 0.5% per consignment and 0.4% a month in bonded storage for rectified spirit	Power alcohol moves on Form PAMR-1 under the 2019 rules, with an Under Bond field

What each line should capture

Use your state's form as the legal record. Behind it, hold the data below for every movement. Most disputes trace back to a missing field.

Date, shift and document number.
Product and grade: ethanol, ENA, rectified spirit, impure spirit.
Tank or receiver number.
Bulk litres, temperature and strength.
Absolute litres.
Source: still run, tank transfer or receipt.
Destination, permit or pass number, and vehicle.
Dip reading before and after.
Excise officer's name or attestation where required.

Bulk and absolute litres

Bulk litres are the volume of liquid. Absolute litres are the alcohol in it. For strength stated as percentage by volume, multiply bulk litres by strength and divide by 100.

For example, 10,000 bulk litres at 99.6% v/v holds 9,960 absolute litres. Correct strength readings for temperature using the tables your department accepts. Maintain both figures, because a blending or dilution step changes bulk litres while absolute litres should hold steady.

The monthly agreement

Three separate records should agree: the register, the tanks and the gate. Run this before you sign any return. Take your state's date as the deadline, such as the 5th and 7th in Maharashtra's 1966 forms.

Opening balance equals last month's closing balance, by tank and grade.
Production agrees with approved still runs.
Tank transfers net to zero across tanks.
Issues agree with passes, gate records and invoices.
Physical dips taken at close, with the officer present if your rules require it.
Difference worked out in absolute litres and compared with the allowance.
Excess loss reported in the prescribed form, with reasons.
Out-of-limit batches kept on a separate line until released.
Bonds and transit certificates tracked to closure.

Where audits find problems

The CAG's 2009 report on Uttar Pradesh shows the risk. It found spirit issued under bond by four distilleries with received quantities short by more than the allowed wastage, and it said duty of Rs 1.45 crore should have been recovered. It also questioned re-distillation wastage claims that the rules did not support.

Two lessons follow. Track each bonded consignment until the receipt comes back. Claim wastage only under a rule you can cite.

Records in one place

SugarOS, a sugar mill ERP, keeps a bond register written only by the system, in bulk and absolute litres, with a monthly return and a comparison of register, tanks and gate. It tracks litres only, so duty and bond value stay in your excise working.

This is general information. Rule numbers and limits change. Confirm forms, wastage limits and bond conditions with your excise officer, accountant or legal adviser before you rely on them.

Frequently asked questions

Is there a standard national format for an excise bond register?

No. Each state prescribes its own forms. Ask your Distillery Officer for the current set, including any online system your state uses.

Who keeps the register?

The licensee keeps it under excise supervision. Maharashtra's 1966 rules, for example, have the licensee and the Distillery Officer maintain certain registers.

What wastage is allowed?

It depends on the state, product and stage. Karnataka's Rule 25 refers to a 1% allowance on stock, while Maharashtra's forms use 2% and 0.5% reporting points. Check the current rule for your case.

Does ethanol for oil companies go through the same register?

It usually stays under state excise control, but the forms vary. Uttar Pradesh has separate power alcohol movement rules. Confirm with your officer whether ethanol needs its own account.

Should the register hold duty amounts as well as litres?

Where duty or a fee applies, your excise account needs both. Ask your accountant how to tie the duty figures to the litre account.

Sources

Talk to SugarOS